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 Siemens’ Thomas McCausland Has A Vision For The
Future Of Medicine
Allison Stein
Wellner
August 2002 - Continental - IT’S THAT TIME OF YEAR AGAIN – time
for your annual medical checkup. You drive into your clinic’s parking lot
and insert your smart card into the entrance slot. In that one simple move,
you have paid for your parking and are registered in the doctor’s office for
your exam. By the time you park and enter the clinic, the doctor is ready to
see you. She clicks open your file on her desktop computer and, at a glance,
has access to all of your medical data: family history, insurance
information, recent lab results. Results from an X-Ray or CT scan she orders
are downloaded directly into your file – no chance of loosing your records.
She will easily be able to have a specialist examine your test results, no
matter where that person happens to be at that moment – and without the use
of a messenger or a mail service. If you ever decide to switch doctors – or
if you fall ill while you are traveling in another city – you know that you
will never have to worry about filling out another family history form or
explaining about your allergy to penicillin. The doctor who helps you will
have access to all the information your family doctor has.
Welcome to Tom McCausland’s vision of the future of medicine – one that
could become a reality sooner than you might expect. As the president and
CEO of Siemens Medical Solutions USA, McCausland heads one of the most
successful divisions of an enormous multinational company – Siemens AG,
headquartered in Munich, Germany. Siemens has its hands in everything from
light bulbs to light rail vehicles. Its medical division makes information
technology software for hospitals, million dollar imaging equipment, hearing
aids and more. In fact, if you’ve had any interaction with the medical world
recently, you’ve probably encountered one of Siemens’ products. Every year
in the United States, 2.5 million ultrasound tests are reviewed and archived
using Siemens’ software. Every day, at least 30,000 cancer patients receive
treatment from Siemens’ radiation treatment systems. All told, SMS posted
sales of 7.2 billion euros (about 6.5 billion) in fiscal 2001, up 42 percent
from 2000.
Siemens Medical Solutions has its U.S. headquarters in Iselin, N.J., a
few minutes from a one–time home of Thomas Alva Edison, inventor of the
light bulb and the phonograph.
McCausland might have to channel some of Edison’s spirit as he tackles
today’s messy health care system. More than $1 trillion is spent every year
on a tangled web of primary care physicians and pharmaceuticals, equipment
and specialists, hospitals and clinics. Our places of healing are far from
smooth operators – they are more like busy hives of carefully controlled chaos.
It’s more than just irritating and uncomfortable – it’s dangerous. A recent
study by the Institute of Medicine at the National Academy of Sciences found
that 98,000 patients die annually because of preventable medical errors.
McCausland believes his company is going to help untangle this web,
replacing untold reams of paper and countless human errors with elegant
systems powered by information technology. These days, a CEO’s touting of
the transformational promise of digital sounds like the punch line of a
well-worn joke. But McCausland’s vision is becoming a reality, one step at a
time.
Two major projects are already under way, designed to harness the power
of digitized medical information: Saint John’s Health center, a 233-bed
community hospital in Santa Monica, California, that was hit hard by the
1994 Northridge earthquake, is being rebuilt and retooled as an all-digital
hospital. The $314 million project will include everything from smart
building design (automated temperature control, for example, and fire alarm
systems that talk to a nurse’s station) to the implementation of Picture
Archiving and Communication System (PACS) technology. PACS makes it possible
to transmit medical images from one location to another, allowing other
doctors to share the results with their patients and colleagues, in real
time – no more trips to the records room, or even to a file cabinet.
A larger undertaking will result in the nation’s first digital hospital
designed from the ground up. HealthSouth Medical Center, a $125 million
project, is a 219-bed facility currently under construction in Birmingham,
Alabama.
If all goes according to McCausland’s plan, the digital hospitals will
serve as models for the entire health care industry. At the same time, they
will help to further establish Siemens as the gold standard of medical
information technology – the Windows operating system of the health care
world, if you will. “We want to be the Microsoft of the medical industry,”
McCausland says.
This is not the kind of statement he makes lightly. An electrical
engineer by training, McCausland, 59, was born in Syracuse, NY, the child of
immigrants from Belfast, Ireland, and was the first member of his family to
get a college education. Perhaps that’s why he isn’t a flamboyant
media-hound sort of business leader like Intel’s former CEO and now board
chairman. Andy Grove, whom he admires, or, for that matter, Bill Gates. Ask
McCausland about his accomplishments and he’ll quickly deflect the credit to
his employees. “People are the main thread in any business. I hire the best
and the brightest and provide them with clear objectives and clear goals. “
he says. “I empower them to make the best possible decisions.”
Ask him about how he encourages the frantic pace of innovation at the
company – two thirds of SMS’ offerings are less than three years old; the
company applies for a new patient almost every day – and he’ll credit his
customers: “I don’t think that I am the one encouraging innovation. I
believe that our customers encourage us to continue to advance the medical
industry. We all have the same goal of improving the industry to make it
safer and more cost effective. Through the close partnerships with our
customers, we are able to quickly identify their needs and work to develop
solutions that can meet their daily challenges.”
Although McCausland shies away from accepting credit for his
accomplishments, it is clear that his success is due to more than his staff
and his customers. In fact, he has a history of walking into difficult
business situations and quickly turning them around. McCausland started his
career at Westinghouse and joined Siemens in 1986. As a general manager and
a vice president within the unprofitable motor division of Siemen’s Energy
and Automation, McCausland increased sales by 300 percent and had the
division back in the black within two years.
Of course, there are the specifics of what he did to get that result: He
improved customer relations, sharpened a focus on the most profitable parts
of the business and encouraged teamwork between labor and management. But
more revealing is the way he figures out what has to be done. McCausland
relies on his engineering training to see him through complicated business
problems – whether it is reviving slumping division sales or helping to fix
the health care system in the United States. He looks closely at the
existing system, figures out “how it’s put together and built,” he says, and
then finds ways to remove inefficiencies, resolve other problems and create
a system that is healthy enough to tackle bigger challenges.
“Tom has a great ability to distill issues down to the essential, taking
complex information and quickly identifying the underlying elements,
drilling down to the essential and the important,” says John Pavlidis, who
once worked for McCausland and is now a president of Siemens’ Ultrasound
division.
When he was offered the CEO slot in 1997, McCausland set about applying
his business philosophy to SMS. He examined the organization and implemented
some changes, including separating the sales and service function. He did
many of the same things he had done on the energy side: bolstering teamwork,
increasing focus on the customer and on the most profitable parts of the
business. Then he turned to the bigger goal: making SMS the company that
would help bring medicine into the future.
As McCausland saw it, there were two major obstacles to the “big vision”
of an efficient integrated health care system. One was that several
different companies were supplying various parts of the medical chain – a
hospital could have as many as ten manufacturers providing just one
department of the hospital with equipment – and often the machines wouldn’t
be compatible. (If you tried to get a Mac to run a Windows program a few
years ago, you’ll know the frustration.) Not only that, but equipment that
served the same function would have a different interface on different
floors, depending on the manufacturer. That made it confusing for the staff.
Even digitized information, such as digital images from a CT scan, couldn’t
be combined with other digital information, such as a patient’s family
history.
McCausland first made sure that Siemens processes were compatible with
each other and that their product interfaces looked similar for the health
care professionals who were operating them. In 1999, the company launched
the Windows-based syngo software, a system for medical imaging designed to
make Siemens products compatible and their interfaces similar. (The hope is
that syngo becomes standard across all manufacturers.) Then, in 2000,
Siemens rounded out its own offerings by acquiring Shared Medical Systems,
the leading medical IT company at the time, and Acuson, one of the pioneers
of ultrasound equipment.
The second problem is the larger one: money. To reap the benefits of a
fully integrated system, all of the machines in a hospital should talk to
one another, all of the clinics affiliated with a hospital should be able to
easily share information, and all of the doctors in the nation should be
able to communicate from their offices using the same computer language. It
all costs big bucks. (Consider that the replacement of St. John’s Health
Center, a relatively small hospital in a nation of 5,810 hospitals, costs
$314 million.) After years of cuts in federal funds for Medicare and
Medicaid, many hospitals are keeping a closer watch on the bottom line.
Spending millions of dollars to upgrade systems that are at least functional
may be less of a priority. It’s a thorny problem, one that all
industrialized nations are facing, says McCauskland’s boss, Erich R.
Reinhardt, president and CEO of Siemens Medical Solutions Worldwide: “We are
convinced that our strategy of offering customers innovative solutions that
make for more efficient workflow, reduce costs and simultaneously provide
higher-quality patient care will ensure our future success and growth,” he
says. In other words, Siemends is going to have to get the medical community
to spend money to save it.
McCausland will have to sell the health care industry on the vision of a
seamless future. The successes are starting to accumulate. Last year, for
example, Memorial Hospital in Colorado Spring, Colorado, opened a fully
digital Radiology and Imaging Center. The digital images are combined with
other information, such as the patient’s history, lab results and medication
data; waiting times are diminished, information is quick and easy to access,
and the patient’s experience is more comfortable. It’s not quite the whole
picture of the future of medicine that McCausland envisions – but the future
is definitely getting closer every day. |
